I use a cable running directly from my amplifier to my PC (so I don't have to use my computer's rather crappy mic) and then I record it with Audacity. it's not the best quality but it's cheap and it sounds ok.

It depends... Ive been using Cubase sequenceer and VST technology for years now and Ive done quite an good sounding stuff, but recently ive been starting to think, that "perfect" sound should be done with guitar plugged straight to soundcard input through your amplifier output.

While virtual technology can produce awesome results like IK multimedia's amplitube series or guitar rig series, it still have "unnecessary" or unwanted sidenoises as a result of variety of computer issues. But worth for trying anyway.

If you plan using only guitar, amps and pedals or POD like stuff, you only need a decent soundcard and todays standard PC to record quality audio, ofcourse you will need good cables, pedals, guitars, guitar pickups and so on to produce "perfect" sound, but it still most "street-credible" sound imho.

@Empirism WOoooW!! i got all what is written above , but i found that recording depends on what you are going to record and i think the more i will get experience in guitar the more experience in recording will increase with it , i mean if i know alot about recording and only little in playing i sure will suck , i will learn more and more first in playing and im pretty sure recording would be easire